The rates are set to increase 17.5 percent in beach towns and 28.9 percent on the mainland.

That’s not as much as the 70 percent and 50 percent hike in those areas the N.C. Rate Bureau had requested, but it will affect homeowners, according to local officials.

“It’s just an intolerable situation,” Rep. Bonner Stiller (R-Oak Island) said recently. “It’s just going to be crushing to a lot of people.”

“There has been a lot of speculation surrounding this homeowners rate filing, but I feel that we’ve reached a settlement that is fair to both consumers and insurance companies in North Carolina,” Insurance Commissioner Jim Long stated after the decision.

“No one likes to see their insurance rates go up, but the industry made a strong case for allowing some increases this year. The silver lining is that most consumers won’t see nearly the increases that were initially proposed.”

The N.C. Rate Bureau general manager said recently the recommendations are determined by what the expected losses are going to be, what the expected expenses of the insurance companies are going to be and some profit.

Stiller said the fact the bureau requested such a large increase and was content with the smaller increase “takes away all their credibility.”

“If they ask for 70 and they don’t need 70, they aren’t being very truthful,” he said. “This is not a game to be playing with the citizens of the coastal counties.”

Stiller serves on the N.C. General Assembly’s Joint Select Study Committee on the Potential Impact of Hurricanes on the North Carolina Insurance Industry, and he doesn’t see the need the rate bureau, representing the insurance industry, is asking for.

“So far, the insurance companies are not out any money,” he said.

In addition to private insurance rates, the surcharges and deductibles for the Beach Plan have also been increased in coastal counties.

The Beach Plan is an insurer-funded coastal insurance program created by the state legislature because many companies won’t provide wind coverage to the 18 coastal counties. Instead, the insurance companies are assessed, and the money goes into the Beach Plan.

According to the N.C. Joint Underwriting Association, which administers the plan, the current surcharge factor of 1.15 will be increased to 1.25 beginning in February of 2009 for full wind and hail coverage, while the wind coverage will increase from 1.05 to 1.15.

The Beach Plan’s deductibles will increase 2 percent with a $1,000 minimum everywhere except Bald Head Island, where it will increase 5 percent.

Steve Candler, legislative director for the Brunswick County Association of Realtors, said the new numbers are “terrible” and not conducive to people buying homes.

“This is all into the cost of a home. We talk about losing value. The thing about these governmental things is this is not equity you’re losing. It’s cash out of your pocket.”

The reason behind the changes, he said, is many in the industry are concerned the Beach Plan is underfunded.

Candler and other Realtors’ representatives have asked the rate bureau to let them in on the process so they can see for themselves.

“We’ve asked the insurance companies to show us where they are; what’s the financial strength; show us what your model is and what your losses are instead of just saying ‘We need this. We’re in trouble.’… Show me that these are rate increases that you absolutely have to have.”

So far, they have not been successful.

Candler’s other argument is that, of the last 10 or 12 hurricanes that have hit North Carolina, only three or four have caused major damage east of I-95.

“The rest have been west,” he said. “Fran and Hugo have been more devastating in the western counties.”

And, he added, “Those folks in other areas own homes here. They have rental properties down here, and they look for their rental income. It’s all tightly connected all across the state.”

Candler said the N.C. Association of Realtors is on the same committee with Stiller and, like him, NCAR representatives have expressed concerns about the increases.

“The only thing that will help is us getting to the table and finding out what the needs are, what the model is. That would help the understanding of all involved—not just Realtors, but the tourism industry and others as well.”

Stiller agreed, saying he doesn’t understand the need for additional increases since rates have increased over the past four years, and still few agencies are writing wind and hail policies east of I-95.

“Less than five are writing insurance for the coastal counties. There is nobody.”